Bank reward programs to shield debtors from hikes
With an interest rate hike by the European Central Bank in July considered virtually certain, Greek borrowers will nevertheless remain largely unaffected, provided they remain up to date with their mortgage payments, as a result of the banks’ reward programs for performing borrowers.
The protection applies to roughly 500,000 borrowers who took out mortgage loans with a floating interest rate and have not missed payments.
It started in May 2023, while many borrowers have even seen their mortgage payments shrink as a result.
Similar programs are also being activated by loan management companies, while the protected loans amount to an estimated 20 billion euros.
The reward programs were introduced to protect households from high interest rates and future hikes in the benchmark rates but do not apply to fixed-rate mortgage loans, which are not affected by interest rate hikes.
The programs’ span 12 months of payments, starting with that of June. In order to remain in the program and pay lower installments, borrowers must pay their mortgage installments on time, as the delay of even one installment can exclude them from the program’s benefits.
